Home Programmes and Schemes Himalayan North Eastern Transport Subsidy Scheme

Transport Subsidy Scheme

Brief about the Scheme

Government of India had introduced Transport Subsidy Scheme (TSS) on 23.7.1971 to develop industrialization in the remote, hilly and inaccessible areas. The scheme was applicable to all industrial units (barring plantations, refineries and power generating units both in public and private sectors irrespective of their size). Under the scheme, subsidy on the transport cost for transportation of raw material and finished goods to and from the location of the unit and the designated rail-head was reimbursed for a period of 5 years from the date of commencement of commercial production. For North Eastern states, subsidy is 90%. However, for the movement of goods within NER, the subsidy is 50% on finished goods and 90% on raw material. TSS was modified and notified as “Freight Subsidy Scheme (FSS) – 2013, w.e.f. 22.1.2013 for a period of five years. The Scheme has been discontinued with effect from 22.11.2016. However, industrial units registered under the scheme prior to the date of issue of DIPP’s notification dated 22.11.2016 will be eligible for the benefits of the residual period under the scheme.

  1. Scheme Objectives: - to develop industrialization in the remote, hilly and inaccessible areas in 8 States of North Eastern Region, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Andaman & Nicobar Administration, Lakshadweep Administration and Darjeeling District of West Bengal.

  2. Coverage and eligibility: - FSS covers 8 States of North Eastern Region, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Andaman & Nicobar Administration, Lakshadweep Administration and Darjeeling District of West Bengal. TSS is applicable to all industrial units (barring Plantations, Fly Ash, Refineries, Power generating units, Coke, including Calcined Petroleum Coke industry and the units producing tobacco and manufactured tobacco substitutes, pan masala and plastic carry bags of less than 20 microns), both in public and private sectors irrespective of their size. Under the scheme, subsidy on the transport cost for transportation of raw material and finished goods to and from the location of the unit and the designated rail-head was reimbursed for a period of 5 years from the date of commencement of commercial production. For North Eastern states, J&K and UTs, subsidy is 90%. For HP, Uttarakhand and Darjeeling Districts of West Bengal it is 75% of transport cost. However, for the movement of goods within NER, the subsidy is 50% on finished goods and 90% on raw material.

  3. Budget Availability / utilization since last five years: - The budget allocation for TSS/FSS for the 12th Five year plan is Rs.500 crores, however, Rs.678.39 crore (including Rs.70 crore allocated at BE 2016-17) has already been released till 29.03.2017. Details of budget availability for the Policy during the last five years are as under:

    (Rs. in crore)

    Year

    Plan Allocation

    Plan Expenditure

    Non-Plan Allocation

    Non-plan expenditure

    2012-13

    222.73

    222.73

    -

    -

    2013-14

    220.00

    220.00

    -

    -

    2014-15

    124.50

    124.49

    -

    -

    2015-16

    60.00

    60.00

    -

    -

    Year 2016-17 (Rs. in crore)

    Year

    Plan Allocation

    Plan Expenditure

    Non-Plan Allocation

    Non-plan expenditure

    Q1

    70.00

    69.33

    -

    -

    Q2

    0.67

    -

    -

    -

    Q3

    0.67

    0.66

    -

    -

    Q4

    0.01

    0.01

    -

    -

  4. Physical Progress against milestones till the end of 2015-16: - Since under TSS/FSS, subsidy on eligible transport cost of raw material and finished goods are given based on the actual quantity of transportation, the physical progress under the schemes cannot be quantified.

    Salient features of the Policy: Under the schemes, subsidy on the transport cost for transportation of raw material and finished goods to and from the location of the unit and the designated rail-head was reimbursed for a period of 5 years from the date of commencement of commercial production. For North Eastern states, J&K and UTs, subsidy is 90%. For HP, Uttarakhand and Darjeeling Districts of West Bengal it is 75% of transport cost. However, for the movement of goods within NER, the subsidy is 50% on finished goods and 90% on raw material. Details in this regard is as under:

  1. North Eastern Region

    1. Movement of raw material – 90% of eligible transportation cost

    2. Movement of finished Goods – 50% of eligible transportation cost within NER and 90% of eligible transportation cost for other areas

    3. Movement by air of electronic components – 75% of eligible transportation cost of air freight from Kolkata to nearest airport plus 90% of eligible transportation cost by rail/road

    4. Movement by inland waterways – 90% of eligible transportation cost

  2. Sikkim and Jammu & Kashmir

    1. Movement of raw material/finished goods – 90% of eligible transportation cost

    2. Movement by air of electronic components in J&K – 75% of eligible transportation cost of air flight from Delhi to nearest airport plus 90% of eligible transportation cost by rail/road

  3. A&N Islands and Lakshadweep

    1. Movement of raw material/finished goods – 90% of eligible transportation cost from Chennai/Cochin (sea & road)

  4. Himachal Pradesh, Uttarakhand and Darjeeling (West Bengal)

    1. Movement of raw material/finished goods – 90% of eligible transportation cost

    2. Movement by air of electronic components – 75% of eligible transportation cost of air freight from Delhi to nearest airport plus 75% of eligible transportation cost by rail/road.

  1. Implementing Agency: - DIPP is the implementing agency of TSS/FSS. The various nodal agencies for disbursement of subsidies under the schemes are:

    1. North  East  Development  Financial  Corporation (NEDFi), Guwahati for the eight states of North Eastern Region;

    2. Jammu & Kashmir Development Finance Corporation Ltd. (JKDFC) for Jammu & Kashmir;

    3. Himachal Pradesh State Industrial Development Corporation (HPSIDC)  for Himachal  Pradesh;

    4. State Industrial Development Corporation of Uttarakhand (SIDCUL) for Uttarakhand.

    5. Govt. of West Bengal for Darjeeling District of West Bengal.

    6. Respective UT Administrations for A&N Islands and Lakshadweep.

  2. Monitoring and Review Mechanism: - The Schemes have inbuilt provisions for their monitoring. In order to check any misuse, Directorates of Industries in each beneficiary State/UT are required to (i) carry out periodical checks to ensure that the raw materials/finished goods for which transport subsidy is given in actually used for the intended purpose, (ii) to draw up procedures and arrangements for scrutinizing the claims and for promot payment of the claims, (iii) to lay down a system of pre-registration and to fix and indicate the capacity of the units during registration, (iv) to lay down procedure to ensure regular inflow of information regarding the movement of raw material and finished goods, (v) to lay down that statistics of production and utilization or raw material should be maintained and kept open for inspection. Government of India has also devised detailed check-lists for submission of claims indicating all such information to prevent misuse of the provisions of the schemes. Any false statement made deliberately by any industrial unit or any misrepresentation of facts by it will disqualify it from the grant of transport subsidy.

  3. Evaluation of the Scheme: - Performance Audit of TSS, 1971 by the Comptroller and Auditor General of India (C&AG) had pointed out several instances of irregularities. Department of Expenditure had suggested that the Scheme is prone to misuse, often leads to malpractices, including false vouchers which are unverifiable. DIPP conducted a study on the performance of TSS/FSS in some targeted States. The Study Report submitted in July, 2016, inter-alia, recommended that the focus of financial assistance should be more on asset formation and capital investment rather than on revenue support schemes like TSS/FSS. In view of development of new roads and rail linkages and after considering the above observations, The Freight Subsidy Scheme (FSS), 2013 has been discontinued, with effect from 22.11.2016. However, industrial units registered under the scheme prior to the date of issue of DIPP’s notification dated 22.11.2016 will be eligible for the benefits of the scheme.


more...

 

  • Transport Subsidy scheme (178.96 KB)
  • Checklist for scrutiny of claims under Transport Subsidy Scheme (TSS), 1971 / Freight Subsidy Scheme (FSS), 2013 - Simplificatio (1.49 MB)
  • Transport Subsidy Scheme (TSS), 1971 - applicability to North Eastern Region (NER) (1.17 MB)
  • Checklist for scrutiny of claims under Transport Subsidy Scheme (TSS), 1971 / Freight Subsidy Scheme (FSS), 2013 - Simplificatio (958.43 KB)
  • Checklist for scrutiny of claims under Transport Subsidy Scheme (TSS), 1971 / Freight Subsidy Scheme (FSS), 2013 - Simplificatio (583.97 KB)
  • One year time limitation for submission of claims under TSS, 1971 / FSS, 2013 - clarification regarding (798.88 KB)
  • Transport Subsidy Scheme 2009-10 - 15th September, 2009 (2.72 MB)
  • Transport Subsidy Scheme 2009-10 - 23rd February, 2010 (7.3 MB)
  • Revised checklist under Transport Subsidy Scheme 1971 (388.52 KB)
  • Chesklist for scrutiny of claims under TSS/FSS - clarification (388.52 KB)
  • One year time limitation for submission of claims under TSS/FSS - clarification (400.84 KB)
  • Freight Subsidy Scheme (FSS), 2013 - amendment (172.99 KB)
  • One year time limitation for submission of claims under TSS, 1971 / FSS, 2013 - clarification (117.12 KB)
  • Clarification in respect of scrutiny of claims under FSS, 2013 (201.2 KB)